Posted on 04/20/2023 12:33:16 PM PDT by Twotone
Just when you think the Biden administration can’t possibly have any more awful ideas, his team rolls out a plan to punish Americans with high credit scores to subsidize high-risk homebuyers.
On Wednesday, The Washington Times reported that starting May 1, Americans purchasing a new home or refinancing their existing mortgage can expect to pay higher mortgage rates and monthly fees if they have a higher credit score. Americans with lower credit scores and smaller down payments will be given better rates. In other words, Biden is essentially stealing from the rich to give to the needy by adjusting the fees on loan-level price adjustments.
“The changes do not make sense,” senior loan officer at Bay Equity Home Loans Ian Wright told the Times. “Penalizing borrowers with larger down payments and credit scores will not go over well. It overcomplicates things for consumers during a process that can already feel overwhelming with the amount of paperwork, jargon, etc. Confusing the borrower is never a good thing.”
It makes sense if you are a member of the Biden administration. In the name of equity, the Biden administration seeks to close the racial gap in homeownership. To do this, they are enacting numerous changes to the housing market that will benefit those at the lower end of the spectrum — which tend to be minorities for a variety of reasons.
So, according to The New York Post, industry experts say that its going to wind up backfiring.
“It’s going to be a challenge trying to explain to somebody that says, ‘I worked my whole life for high credit and I’ve put a lot of money down and you’re telling me that’s a negative now?’ That’s a hard conversation to have,” one expert told the Post.
Even former Obama officials are sounding the alarm.
“It’s unprecedented,” David Stevens, Federal Housing Administration commissioner under President Barack Obama, told the Post. “My email is full from mortgage companies and CEOs [telling] me how unbelievably shocked they are by this move.”
The push to put “riskier mortgages” in the hands of those who couldn’t otherwise afford homes also could cause disruption should a recession hit — which the Federal Reserve is predicting.
None of this matters to President Joe Biden and his ilk. They never let a bad idea get in the way of equity.
How can this lunatic do this?
He can just single out one group of people for PUNISHMENT???
“I believe at one time you needed 20% 0f the borrowing price.”
According to the National Association of Realtors the average down was 25 percent and the same in 2005 and 2009.
Homeownership jumped in 1989 from 64% to 69% in 2005 and 2006 but started down steadily after. It was listed at 67% in 2011.
The U.S. economy was still struggling with the effects of its longest recession since the 1930s, which was triggered in large part by the housing crisis, which was in part triggered by the crash of the subprime loan market. African-Americans with similar credit profiles and down-payment ratios to white borrowers were more likely to receive subprime loans. (Congress forced them) And as a result, from 1993 to 2000, the share of subprime mortgages going to households in minority neighborhoods rose from 2 to 18 percent. So like I said, this is not new, it’s repeated and made to look like a silk purse.
Conservatives have claimed that the financial crisis was caused by too much regulation aimed at increasing home ownership rates for lower income people. They have pointed to two policies in particular: the Community Reinvestment Act (CRA) of 1977 (particularly as modified in the 1990s), which they claim pressured private banks to make risky loans, and HUD affordable housing goals for the government-sponsored enterprises (”GSEs”) — Fannie Mae and Freddie Mac — which they claim caused the GSEs to purchase risky loans, and led to a general breakdown in underwriting standards for all lending.
And by the time the feds accomplished a reverse anal/cranial insertion, the worth of the homes in question were devalued below the price of the product so they couldn’t resell to get out of the loss anywhere near the on paper value of the loan. So, all they could do was walk away with a foreclosure.
wy69
Marx,”From each according to his ability, to each according to his needs”
There ya go, plain as day.
Be sure of one thing....That Biden will find a way to screw up a free lunch. And he wants to run for re-election? The only that makes less sense than that is that some people would actually vote for him.
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